Gerrit Bezuidenhout
The pressures currently burdening South African weaner calf prices will most likely continue doing so until May.
“The main reason for lower weaner calf prices stems from continued pressures burdening consumers. Although Easter weekend usually leads to more purchases and subsequent increases, the consumer is economically speaking very weak and I do not know if it is going to change any time soon,” says Dewald Olivier, chief executive officer of Red Meat Industry Services (RMIS).
Easter weekend previously acted as a predictor of better red meat prices since consumers purchase more red meat for the festive season but this year it does not seem to be the case.
Dewald says the situation is also not going to improve any time soon. “What has changed in the meantime and what will still change that could change the situation for the consumer? It is an open-ended question, and the fact of the matter is that with less expendable income, consumers are also not going to increase their purchases. On the contrary, it is only getting worse for the consumer.”
He further says prices might stabilise slightly but not significantly.
“The market has a slower reaction, and it only later spills over to weaner calves. It is a festive season but there is nothing else that will increase prices. As for political circumstances, there was a cabinet reshuffle that was supposed to improve optimism, but that also did not happen. The consumer mistrusts the economy. The festive season can bring change, but it will not be as big as producers are hoping for.”
Dr Johnny van der Merwe, an agricultural analyst connected to North-West University, says weaner calf prices stay under pressure due to decreased demand coupled with an increased supply.
“Weaner calf prices decreased by 2% to an average of R33,47/kg, with the price of calves under 200 kg dropping to R35,41/kg, while the price of calves over 200 kg dropped to R33,63/kg.” He says that the lowest point could be reached by March and that these prices could possibly be sustained until the middle of May if the demand increases.
Imports also increased
In the meantime, a report by agricultural inspection company AgriInspec indicates that red meat imports increased on an annual basis during January 2023. The report states that beef imports increased by 7% compared to January 2022. Altogether 358,89 tonnes of beef were imported in January at a free-on-board price of R44,62/kg. Most of the red meat, 46 tonnes, was imported from Namibia.
The import of live weaner calves rose in January from 32 539 calves at R7 751,90 per calf, which is 0,5% less than in January 2022.
